In today’s briefing:
- The New Aisin (7259) MTP – Selling Crossholdings, Eventually
- Aisin (7259) | MTP Gains Traction
- Ryohin Keikaku: Big Moves Ahead with Strong FY24 Guidance
- Perfect Medical : Previewing the H1 FY24, Soft China To Lessen Growth
- Health And Happiness (1112 HK): Strong Growth From Nutritional Supplements
- Company Update – NIKE INC.
- NEC (6701 JP): Enough for Now
- Snap-on Inc: A Look at Their Strategic INDYCAR & Indianapolis Collaborations – Major Drivers
- Company Update – Constellation Software Inc.
- ABC Mart Expands Lead in Footwear
The New Aisin (7259) MTP – Selling Crossholdings, Eventually
- Toyota Group autoparts maker Aisin Seiki (7259 JP) today announced a new Medium-Term Plan. They plan to shift their business away from “entrusted” business, towards BEV, Brakes, and “Safe/Comfort Entry”
- They aim to grow revenues 25% from 2021 to 2025 and an additional 10-20% by 2030.
- They also aim to improve investment and capital efficiency, and that’s where we can look at the interesting possibilities.
Aisin (7259) | MTP Gains Traction
- Aisin’s stock price rose by +8% today after the company held its MTP strategy briefing
- Aisin to restructure its business portfolio and focus on new growth areas for EV’s – eAxle, battery frames, and braking technologies
- Aisin aims to generate ¥400b from balance sheet reform – asset sales, inventory management and sale of cross-shareholding.
Ryohin Keikaku: Big Moves Ahead with Strong FY24 Guidance
- Ryohin Keikaku (7453 JP) experienced a 45% leap in its share price since its last earnings announcement, primarily fueled by a positive OP surprise of nearly ¥3.0bn.
- Our analysis indicates the potential for another big earnings beat in FQ4, primarily because the consensus remains conservative in its cost assumptions.
- Additionally, we anticipate that the company will provide FY24 OP guidance in the range of ¥45-50bn. This would constitute a significant upside surprise compared to the current FY24 consensus.
Perfect Medical : Previewing the H1 FY24, Soft China To Lessen Growth
- Perfect Medical Health (1830 HK) will report its H1 2024 results in late November 2023. We expect slow China growth to result in revenue/profit growth of 10%/15% YoY.
- The company will continue to open outlets in HK, and the plan is to open ten by the end of FY24 (3-4 at the end of H1FY24e).
- The stock trades at 12.7x PE FY24e, with an 8.7% dividend yield and around 16% of the market capitalization in net cash and investments (~800 mn HKD).
Health And Happiness (1112 HK): Strong Growth From Nutritional Supplements
- Health And Happiness (H&H) (1112 HK) has transformed from an infant formula company to a nutritional supplements company.
- The company currently trades at 5.3x 2024E PE – still valued as a Chinese infant formula company and not a growing and more global nutritional supplements company.
- As the company continues to deliver growth in the nutritional supplements business, rerating will come eventually.
Company Update – NIKE INC.
- NIKE, Inc. is engaged in the designing, marketing and distributing of athletic footwear, apparel, equipment and accessories and services for sports and fitness activities.
- The Company’s operating segments in- clude North America; Europe, Middle East & Africa (EMEA); Greater China; and Asia Pacific & Latin America (APLA).
- It sells a line of equipment and accessories under the NIKE Brand name, including bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment and other equipment designed for sports activities.
NEC (6701 JP): Enough for Now
- NEC’ is up almost 90% year-to-date to 16X EPS guidance for this fiscal year and 12x targeted EPS three years out. It now looks fairly valued.
- Profit growth is led by IT Services for the private and public sectors, with strength in finance and system integration.
- Social Infrastructure is growing, but in the red. Aerospace and national security are profitable, but margins are low.
Snap-on Inc: A Look at Their Strategic INDYCAR & Indianapolis Collaborations – Major Drivers
- Snap-on Incorporated achieved decent growth in both sales and profitability in its most recent result.
- Moreover, Snap-on’s success in the Tools Group highlighted its ability to innovate and cater to customer needs effectively.
- Snap-on’s customization and profitability, particularly in low-volume production, have been a driving force behind its growth.
Company Update – Constellation Software Inc.
- Our estimations for FY 2023 annual revenue range at around $8,023 million and for 2024 at around $9,219 million.
- The company’s annual revenue reached $6,622 million in 2022 compared to $5,106 million in 2021, post- ing an increase by 29.69%.
- Constellation Software’s gross profit for FY 2022 was $2,271 million, increased by 44.74% compared to $1,569 million for the corresponding period of 2021.
ABC Mart Expands Lead in Footwear
- Japan has a solid if stagnant footwear market, yet it only has one compelling nationwide footwear retailer.
- ABC Mart continues to outperform its smaller rivals, with little competition as its main rivals decline further.
- The real competition is coming from brands selling directly to customers via their own stores and online – and low-cost retailers nipping at its heels from below.
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